In talk with SteelMint, few sponge manufacturers reported that prices are likely to remain firm. But, buyers are still skeptical. Furnace operators may further curtail their production in east and central India due to falling MS ingot/billet prices but firm sponge prices.
Since the starting of monsoon season, domestic sponge offers have moved up sharply by INR 1,200-1,500/MT on the backdrop of low production output and short supply of raw material like coal & iron ore. With the end of monsoon season, buyers are anticipating that prices may come under pressure as there is expectation of improvement in supply.
However, looking at rising raw material prices, SteelMint has questioned to few large sponge merchant sellers about price trend in central, east & south India.
The comments are as follows:
Mr. Rahul Gadodia from Shyam Sel Durgapur mentioned, ”We are not in the position to reduce prices as demand is firm from both domestic & global market. In contrary, increasing coal prices and rising pellet exports may support prices in coming weeks. Recent few export deals concluded to Bangladesh by east based manufacturers at the average price of USD 220/MT, FoB Benapole Port for 78-80 FeM C-DRI lumps.”
Mr Dinesh Goyal, Bajrang Ispat & Power in Raipur said, “Prices will surely sustain at present level due to shortage of iron ore and iron pellet. We have buying of pellet sponge from north and central India. Buyers are looking for quality & quantity.”
Mr. Pawan Batwal from Sunvik Steels, a renowned manufacturers in south sponge market, said, “Increasing coal prices will raise our production cost by approx INR 600-800/MT and it will be difficult for us to cut price in near term post improvement in supply. Sponge future price scenario will be dependent on demand; if demand for long steel improves in near future, sponge prices will find support. Otherwise, it may put pressure on sponge market.”
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